inclusive growth is one of the strategies of government of Rwanda to reduce poverty and inequality. Vision 2020 Umurenge is a pro-poor social protection programme under the country’s growth blueprint, Economic Development and Poverty Reduction Strategy. The strategy that is currently in the second phase aims at poverty reduction through inclusive growth in Rwanda. One of the factors contributing to high poverty levels in the country is lack of formal employment that has resulted into growth of a big informal sector. Informal sector defined Informal sector is part of the economy which is not accounted for through payment of taxes and also is not monitored through any form of government and authority. Activities of informal economy are not included in GDP. The concept of the informal sector was introduced in 1972 by the International Labour Organisation (ILO) in its Kenya Mission Report. inclusive growth is one of the strategies of government of Rwanda to reduce poverty and inequality. Vision 2020 Umurenge is a pro-poor social protection programme under the country’s growth blueprint, Economic Development and Poverty Reduction Strategy. The strategy that is currently in the second phase aims at poverty reduction through inclusive growth in Rwanda. One of the factors contributing to high poverty levels in the country is lack of formal employment that has resulted into growth of a big informal sector. Informal sector in Africa Informal sector is one of the biggest employer’s in Africa, providing employment to vulnerable sections of the population, including women, and youth. Almost...

The Belt and Road Initiative is generating a symphony of development worldwide. The Belt and Road Forum for International Cooperation held in Beijing in May, and attended by more than 1,500 representatives from 130 countries and regions, achieved 270 deliverables. The Mombasa-Nairobi Standard Gauge Railway in Kenya, which opened on May 31, is also a fruit of the Belt and Road Initiative, as China loaned nearly 90 percent of the construction cost to Kenya and helped build the 480-kilometer railway in four years. Overshadowed by the lack of fairness, openness, inclusiveness and public goods over the past few years, global governance needs fresh engines and more inclusive developmental mechanisms. The initiative's developmental finance, for example, comes with both financial services and institutional guidance to complement the market economy of some countries. High on the agenda of the initiative, infrastructure is sought after by a slew of developing countries aspiring for industrialization. China's success in lifting 700 million people out of poverty in about four decades is also a key inspiration for those countries participating in the initiative. Setting rules is no doubt necessary, but China has another important lesson to offer: development does not have a fixed pattern. Uzbekistan and Indonesia would not have received considerable infrastructure loans had it not been for China's State-owned banks. Their request for loans would have been rejected by other banks because international financial "norms" say so. China's infrastructure plans, such as building high-speed railways, have been criticized by some Western observers for their...

The 2017 First Quarter East Africa Trade Report issued by Maersk Line Eastern Africa - a member of A.P. Moller-Maersk - reveals that aggregate trade levels in the region have improved slightly since 2016, resulting in overall year-on-year growth of 1%. According to the company's MD, Steve Felder, in line with what was reported last year, there continues to be a noticeable disparity in performance between the two core trade corridors of East Africa. Container trade in the Northern Corridor, which serves Kenya, Uganda, South Sudan, and parts of Rwanda, expanded by 1%, whereas the Central Corridor, serving Tanzania, parts of Rwanda, Burundi, Zambia, Malawi and DRC, saw a contraction of 12%. “While conditions in the East Africa region have continued to be challenging due to political instability, ongoing macro-economic headwinds and drought conditions affecting certain countries, we’re seeing healthy competition between the two corridors, both fighting for position in terms of some of the ‘swing’ countries that could export or import cargo through either corridor, specifically Rwanda, Burundi, Uganda.” The Northern Corridor While the Northern Corridor (serving Kenya, Uganda, South Sudan, and parts of Rwanda) import market experienced year-on-year growth of 6% in the first quarter, it declined slightly (by 1%) from the last quarter of 2016, says Felder. “In Kenya, liquidity is still very tight, caused by last year’s interest rate capping on the bank lending rate. In the next quarter we are expecting to see a slowdown in the import market as we approach the Kenyan elections on 8...

 Rwanda is shaping up as one of East Africa’s premier business tourism destinations, following efforts by the government and its partners to help strengthen and grow the private sector in the meetings, incentives, conferences, and events (MICE) market. The Trade & Competitiveness Global Practice, a joint practice of the World Bank and International Finance Corporation (IFC), launched in 2012 the Governance for Competitiveness Project (G4C), which helped establish the Rwanda Convention Bureau in 2014. Together, the World Bank Group, which provided US$1.2 million in technical assistance to Rwanda’s Tourism and Conservation Department, and the Rwandan government began using the newly created bureau to promote the country among regional and international clients as a preferred location for business events. Since the project began, there has been substantial growth in this dynamic segment of tourism. In 2016, Rwanda hosted over 40 international conferences, with the Convention Bureau directly engaged in organizing several high-profile events: the World Economic Forum (WEF), The Global African Investment Summit, the African Union Summit (AU) and the Africa Hotel Investment Forum (AHIF). The Bureau also worked on events for AFREXIMBANK and The World Academy of Sciences and Coca Cola’s Annual continental corporate meeting. The increase in meetings, conventions and events following the establishment of the Convention Bureau led to revenues exceeding US$37 million in 2015 and US$47 million 2016. In 2017, revenues from all business tourism in the country are projected to reach US$64 million. “The G4C work with the Convention Bureau on MICE development has had a huge impact,” said...

The east African Securities Exchanges Association (EASEA) has commended the current developments on the regional infrastructure and tasked its technical committee to fast-track implementation of the capital markets infrastructure to provide new possibilities for investors seeking cross-border trade opportunities. This was during the EASEA 29th meeting in Nairobi, Kenya on Friday that brought together regional exchanges chiefs from Rwanda, Kenya, Tanzania and Uganda. Geoffrey Odundo, the CEO of the Nairobi Securities Exchange (NSE) that hosted the meeting, said it is crucial to strengthen the region’s financial markets to attract more investors and increase their liquidity. “An integrated market is critical for attracting foreign investors and increasing liquidity of the region’s market, and as a member of the association, CDSC therefore remains committed towards achieving this key milestone,” added the Central Depository and Settlement Corporation’s (CDSC) head of ICT, James Gikonyo. Speaking at the event, Pierre Celestin Rwabukumba, the Rwanda Stock Exchange (RSE) chief executive officer (CEO), said robust and integrated markets are key to achieve the goals of the East African region’s economic development. RSE automation Rwabukumba told the meeting that RSE was in the final stages of automation of its trading infrastructure, which will automatically be linked to the Central Securities Depository (CSD) and Real Time Gross Settlement System (RTGS) at the Central Bank of Rwanda. Last year, Rwanda launched a 10-year master plan for capital market development. The plan focuses on product development, technology and innovation, capacity building and investor education, savings mobilisation for the retail investors, and...

South Africa last week signed the agreement establishing the Tripartite Free Trade Area (TFTA) during a meeting of the Tripartite Sectoral Ministers Committee in Kampala, Uganda. The meeting was attended by the trade Ministers and officials from the Common Market for Eastern and Southern Africa (Sacu), the East African Community (EAC) and the Southern African Development Community. South Africa did not sign the agreement when it was initially launched in 2015 owing to outstanding work in some of the annexures to the agreement. All of the annexures have now been completed and adopted by the Tripartite Sectoral Ministers Committee. Trade and Industry Minister Dr Rob Davies said South Africa has been a champion of the tripartite process from the beginning and is committed to the process. “The conclusion of these negotiations will be another important step forward in the process and will provide commercial benefits to our business people by enabling them to trade products between Sacu and EAC countries at a reduced or zero tariff,” he said. The TFTA represents an integrated market of 26 countries with a combined population of 625-million people and a total gross domestic product of $1.6-trillion. Once the agreement enters into force, it will reduce the tariffs on goods traded between the tripartite countries and create new opportunities for exports as well as regional value chains. Source: Engineering News

Uganda Revenue Authority has climbed the ladder in the World Customs Organisation (WCO) hierarchy. Commissioner General URA Doris Akol’s Customs team leader, Mr. Dicksons Kateshumbwa on Monday received instruments of power from his South African counterpart, SA Revenue Services Chief Officer Customs & Excise, Jed Michaletos as the World Customs Organization East and South African Regional Group (WCO ESA) chairperson (Uganda). WCO ESA Regional Group brings together 24 countries and Uganda will represent at the WCO policy commission, Mr. Solomon Kimbugwe, a Media Management Officer at URA disclosed to TheUgandan. “This is a big step in the right direction for Uganda,” said Mr. Kateshumbwa. “The countries in ESA are united by customs administrations. The challenges and opportunities that we face are similar. We are going to see more coordination amongst ourselves so as to deal with challenges of illicit trade, challenges of terrorist financing, counterfeit marketing, technology hitches, diversion of goods and others.” Mr. Kateshumbwa, is currently at WCO headquarters in Brussels, Belgium. Uganda’a ascension on the chairmanship follows Kampala’s hosting of the 22nd World Customs Organisation East and South Africa council governing meeting in May for a two-days to discuss matters tax administration. The meeting that attracted 22 countries from East and South Africa was aimed at looking at how best customs can facilitate trade and creating a platform for countries to collaborate and fight mutual challenges within the region. Source: The Ugandan

The economic benefits of the Standard Gauge Railway are set to soar with the ongoing extension from Nairobi to Naivasha, and eventually to Kisumu and Malaba. A railway corridor of this type will create works as a system and its full potential can only be realised when the component parts have been fully laid out, constructed and commissioned. The Mombasa-Nairobi is up and running, with a scheduled passenger service being the first offering. The end-game will easily East Africa’s most ambitious infrastructural project ever, eventually linking Kampala and onward to Kigali under the East African Railway Master Plan. Zeroing in on the Kenyan component of the project, the Nairobi-Naivasha phase, especially, holds great socioeconomic promise, considering some of the SGR-dependant infrastructure being planned for this segment. This phase marks the first component of the Nairobi-Malaba-Kampala SGR and is being constructed by China Communication and Construction Company as the engineering, procurement and construction contractor. Due to the topographical challenges of putting together the SGR in the expansive Rift Valley and the financial implications of this, the 505km stretch is being implemented in three sub-phases: Phase 2A (Nairobi - Naivasha), Phase 2B (Naivasha to Kisumu) and Phase 2C (Kisumu to Malaba). Phases 2A and 2B and the Malaba-Kampala section, are currently at the financing identification stages. A centrepiece of the Nairobi-Naivasha line is the proposed mega industrial park that will be established near the Mai Mahiu Freight Exchange Centre. The dry port will be critical in capturing and aggregating freight to and...

The inauguration of a $3.2-billion Chinese-funded railway, linking the port of Mombasa to the Kenyan capital Nairobi with future extension to the border with Uganda, promises to be a game changer. But only if sticky issues, such as harmonization of procedures and charges, in East Africa are sorted out. Being part of China’s “One Belt, One Road” initiative that targets to upgrade maritime and land trade routes between China and Europe, Asia and Africa, the potential benefits of the railway are huge – not just for businesses in Kenya but the region as a whole. With offers of haulage charges of $0.08 per ton per kilometer on Kenya’s new standard gauge railway (SGR), there is hope for bigger returns for businesses. For years they have had to endure the pain of costly road transport and equally expensive and unreliable service on a dilapidated railway system built by British colonialists more than a century ago. “Today, the cost of transport along the northern corridor accounts for up to 45 percent of the goods and services in the region. The high costs make it hard for businesses to compete effectively on both the global and the local markets. We expect these costs to reduce significantly with the SGR,” the Kenya Private Sector Alliance (KEPSA) says. Industry estimates show that hauling a 40-foot container from the port of Mombasa to the Ugandan capital, Kampala, by truck costs about $3,030 exclusive of handling and clearing fees – which captures why businesses long for cheaper options,...

One way to speed up Africa’s economic transformation is through deeper trade integration. Official statistics put intra-African trade at a mere 13% of the continent’s total trade. That is abysmally low. Higher volumes of intra-African trade are essential so that African countries can do business with each other more frequently and with wider margins. The merits are clear. Firms and businesses are exposed to bigger markets, new opportunities, and a larger pool of capital (including human capital) – and, ultimately, grow their turnover and returns. Consumers buy from a wider variety of products and services at a relatively cheaper cost, and attain a higher consumer welfare status. Labour benefits from skills upgrades and attractive remuneration offered by trading firms. This sets in motion a chain of other economic activities that support and spin off from regional trade. Governments also reap rewards such as a positive balance of payments, a fiscal boost from a wider tax net, and more revenue to invest in public infrastructure. This is a standard international trade position applicable throughout the world; it is therefore not surprising that regional trade deals are a core strategy in countries’ economic policies. So why are intra-African trade volumes so low and, more importantly, how can we increase it? Is it a matter of wrong or ineffective policies? Or a lack of business activity in Africa to take advantage of regional markets and build intra-African trade? I believe it is more the former than the latter, and I will explain why in...